05 September 2019
TOYOTA FORKLIFTS PREFERRED BY COATES HIRE
The nation's largest and most diverse equipment rental company, Coates Hire, has adopted Toyota Material Handling (TMHA) forklifts as its majority brand, with over 600 being in its fleet, nationally.
Thirty-year Coates Hire company veteran, Executive General Manager - Fleet, Peter Davis, said TMHA's history with Coates Hire stems back nearly 20 years and has significantly ramped-up in the last decade. "We've been dealing with Toyota Material Handling for a long, long time - close to 20 years, on and off. In the last 10 years, especially, Toyota has made up the majority of our industrial forklift fleet," said Mr Davis.
He said the shift came after the business adopted more stringent procurement methodologies. "We've always known Toyotas to be a good, solid product, that's why we've had them in our fleet for so long, but more recently we have become stringent in how we procure our equipment. It's important for us to be in front of the technology and safety curves because for us a forklift is typically a 10-year investment.
"We now forecast 12 months-to-two years ahead on what our equipment requirements may be.
"Recently we've gotten into a process where we conduct what we call an RFQ, which is a request for quote. We establish the quantity for our replacement and growth requirements, then we put that out to tender. Toyota has been strongly involved since we've been doing them and has been the most successful in large-order tenders."
TMHA President and CEO, Steve Takacs, said the relationship with Coates Hire has been helped by both businesses having an acute understanding of hiring models. "Having similarities in our business models helps us better understand each other, so we can accurately assist with their goals and provide the best product solutions," said Mr Takacs.
"One of the key things we understand about their business is the emphasis they place on reducing total cost of ownership - which is a major tenet of the Toyota Advantage. "The nature of their business is to focus acutely on numbers. Like any rental business, they're in it to make money and if they can get a product on board that gives them less down-time they're going to make more money. They're also going to have more customer satisfaction.
"In recent times we have delivered about 600 [2.5 tonne diesel] forklifts to Coates, which is exceptional. They switched from another supplier to us and some of the reasons they had for changing were quite flattering."
Coates Hire's Peter Davis agreed that one of those reasons is lower total cost of ownership. "Yes, that's a huge part of what we do; ensuring the total cost of ownership over the life of the asset is as low as possible," said Mr Davis. "We of course need to get the best price we can based on the quantity of our order, but that can easily be undone if we buy inferior equipment and that ends up costing us money throughout its life. In that case, any upfront savings are lost and it can hurt your bottom line very quickly.
"For us, it's about minimising maintenance and labour costs all the way through because that can be higher than the original purchase price. And it's not just how the equipment is serviced, that is actually relatively minor compared with amount of inspections we do.
"Our model is typically short-term hire, so we inspect the equipment every time it comes back from a customer, before it goes back out again. So that happens more frequently than servicing and because of that it has to be efficient. So the machines must be designed to access and check easily, and Toyota forklifts tick that box."
Mr Davis said Coates Hire primarily rents Toyota forklifts out to customers in heavy industry, meaning its equipment must be up to the task. "'We're not small handyman hire. We primarily supply to the construction and mining industries where equipment gets a hard life compared to, say, a warehouse. So it's paramount that our forklifts are tough and last the distance. That's why quality, durability and reliability are so important to us.
"The Toyota product is market-leading in that regard, which makes it great for our total cost of ownership."
TMHA's Steve Takacs pointed out another value proposition: disposability. "Coates looks at repair and maintenance costs over the total life of a product, but they also look at disposability at end-of-life. They do well out of them financially during the service and also when they retire them because it's well recognised that our forklifts retain a very high resale value compared with other products in the market. There's a very high demand for orange forklifts, even at the end of their peak life."
Mr Takacs said another reason the two companies match so well is that their branch networks match in size and capacity. "Price is only one component of Coates' procurement process," he said. "They look at our infrastructure, our ability to support them Australia-wide, and that's another key advantage. They have 600 of our forklifts around the country and we're everywhere they are.
"We have service facilities and support them directly, not through contractors. They take comfort that they're not relying on a dealer here or a contractor there. When they deal with us it's seamless - it's the same level of excellence across the country."
Mr Davis agreed it is important to have supplier support for Coates Hire's extensive network of branches. "We have 160 branches all around the country and not many businesses can support our footprint, but TMHA has a very large and highly skilled support network. Wherever we are, Toyota aren't too far away and that's very important to us."
Safety is also paramount for Coates Hire. "Safety is something we take very seriously for our employees and our customers, and we ensure all product that we hire out and work on meets stringent safety standards.
"We are seeing increasing expectations from our customers the equipment we hire out to them meets their safety standards. "Toyota's safety innovations such as active stability control and operator restraints are a big advantage for us. It helps with compliance.
"Coates also has its own registered training organisation that includes safety training, including for forklifts."
Mr Takacs said that TMHA has recently expanded its product portfolio. "In recent times we have increased our product offerings such as scissor lifts and vertical lifts, electric burden carriers, sweepers and so-on, which Coates can adopt as we continue to build our relationship in the future."
With both Coates Hire and TMHA being powerhouse brands, the companies share a belief in the importance of reputation. "That's a big reason for our longstanding relationship," said Mr Davis. "It's about performance and acceptance. It's important to us that our customers accept the equipment we hire out to them as viable and reputable."
Mr Takacs said he is proud to see Coates representing TMHA forklifts to its customers. "I take quite a bit of pride when I see one of our forklifts with a Coates sticker on it doing the business on a building site.
"Their customer is at arm's length to us. Both of our companies are blue chip and our reputations are of the utmost importance. Having both of our brands together sends a message and helps build confidence amongst customers. They know they're renting a reputable piece of equipment from a reputable company.
TMHA President and CEO, Steve Takacs with CEO of Coates Hires General Manager - Fleet, Peter Davis